Hiring Foreign Staff to Work in Vietnam
Feb. 19 – The number of foreign laborers coming to Vietnam for work has steadily increased in recent years, from 52,633 people in 2008, to 55,428 in 2009, and 56,929 in 2010. However, by September 2011, the number of foreign workers in Vietnam had surged to 78,440 people.
A large portion of the foreign workers in Vietnam originate from Asian countries such as Korea, China, Japan and come as employees of foreign contractors in Vietnam. More and more come to work for or establish foreign direct investment (FDI) projects in Vietnam.
A Vietnamese entity is permitted to recruit foreign workers in order to work as managers, executive directors and experts where local hires are not yet able to meet production and business requirements. Unlike in certain other Asian countries, Vietnamese representative offices are also able to hire staff directly.
To demonstrate the necessity of a foreign employee, thirty days prior to recruiting the foreign employee, the entity must publicly announce recruitment for this position to Vietnamese job-seekers in a Vietnamese newspaper or online portal. Evidence of this announcement must be presented in the application for a work permit for a foreigner employee. The other option is to recruit foreigners through a government-owned employment service center.
In order to obtain a work permit for a position other than a manager or executive director role, the foreign employee must also demonstrate evidence that they can be considered experts “with technical skills and knowledge necessary for the job.”
There are certain situations in which a work permit is not required for a foreign worker. The necessity of a work permit is unclear in certain situations, for example where a foreign corporate member of a Vietnamese entity appoints a foreign worker for its Vietnamese entity, but from practical experience, is generally still required.
Applications for work permits require (first and foremost) a labor contract signed between the Vietnamese entity and the employee.
An employee can engage in one of the following types of labor directly with their employer:
A contract in which two parties do not specify the length of the contract
Two parties agree on a contract lasting between 12 and 36 months and a specific termination date within that time period
Specific or seasonal
A contract lasting fewer than 12 months.
A labor contract must contain a description of the work and tasks to be given and information regarding working hours, breaks, wages, job location, terms of the contract, safety conditions, hygiene and social insurance.
The key government bureau for hiring staff and workers (foreign staff and workers included) is the Department of Labor, Invalids and Social Affairs (DoLISA). DoLISA handles most issues related to employment, labour, salary, social insurance and occupational safety. Meanwhile, Temporary Residential Cards (TRC) are issued by the immigration agency under Ministry of Public Security.
Portions of this article were taken from the August 2012 issue of Vietnam Briefing Magazine titled “Human Resources for Foreigners from Vietnam.” In this issue, we take a look at foreign workers in Vietnam: how to hire, the legal obligations a company bears (including withholding and paying personal income tax and social insurance), and finally a common dilemma – the housing situation.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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